As Output Increases,average Total Cost Decreases

question 267

Multiple Choice

As output increases,average total cost decreases

• A) constantly.
• B) as the average product of labor decreases.
• C) initially and then starts to increase.
• D) in the long run and the short run.
• E) as long as average fixed cost decreases.

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Definitions:

Accounting

Process of measuring, interpreting, and communicating financial information to support internal and external business decision making.

Risk-Return Trade-Off

The principle that potential return rises with an increase in risk, describing the balance between the desire for the lowest possible risk and the highest possible returns.

Leverage

The use of various financial instruments or borrowed capital, such as margin, to increase the potential return of an investment.